he Securities and Exchange Commission has not approved or disapproved of this Fund s shares or determined whether this prospectus is accurate or

Transcription

1 he Securities and Exchange Commission has not approved or disapproved of this Fund s shares or determined whether this prospectus is accurate or complete. Anyone who tells you otherwise is committing a crime.

2 TABLE OF CONTENTS Fund Summary Investment Objective... 1 Fees and Expenses... 1 Principal Investment Strategy... 2 Principal Risks... 2 Performance... 3 Investment Adviser... 5 Subadviser(s)... 5 Portfolio Manager(s)... 6 Purchase and Sale of Shares... 6 Tax Information... 7 Payments to Broker-Dealers and Other Financial Intermediaries... 7 Fund Prospectus Investment Objective... 8 Principal Investment Strategy... 8 Risks Portfolio Holdings Fund Management Portfolio Manager(s) Purchases Redemptions Converting Shares Exchanges Other Important Information About Purchases, Redemptions, and Exchanges Multiple Class Information Shareholder Information Financial Highlights... 34

3 INVESTMENT OBJECTIVE The USAA Aggressive Growth Fund (the Fund) seeks capital appreciation. FEES AND EXPENSES The tables below describe the fees and expenses that you may pay, directly and indirectly, to invest in the Fund. The annual fund operating expenses are based on expenses incurred during the Fund s most recently completed fiscal year. Shareholder Fees (fees paid directly from your investment) Fund Shares None Institutional Shares None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Fund Inst. Shares Shares Management Fee (fluctuates based on the Fund's performance relative to a securities market index) 0.43% 0.43% Distribution and/or Service (12b-1) Fees None None Other Expenses 0.50% 0.25% Total Annual Operating Expenses 0.93% 0.68% Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. Although your actual costs may be higher or lower, you would pay the following expenses on a $10,000 investment, assuming (1) a 5% annual return, (2) the Fund s operating expenses remain the same, and (3) you redeem all of your shares at the end of the periods shown. 1 Year 3 Years 5 Years 10 Years Fund Shares $95 $296 $ 515 $ 1,143 Institutional Shares $69 $218 $ 379 $ USAA Aggressive Growth Fund

4 Portfolio Turnover The Fund pays transaction costs, including commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares of the Fund are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund s performance. For the most recent fiscal year, the Fund s portfolio turnover rate was 68% of the average value of its whole portfolio. PRINCIPAL INVESTMENT STRATEGY The Fund invests primarily in equity securities of large companies that are selected for their growth potential. Although the Fund will invest primarily in U.S. securities, it may invest up to 20% of its total assets in foreign securities including securities issued in emerging markets. PRINCIPAL RISKS Any investment involves risk, and there is no assurance that the Fund s objective will be achieved. The Fund is actively managed and the investment techniques and risk analyses used by the Fund s manager(s) may not produce the desired results. As you consider an investment in the Fund, you also should take into account your tolerance for the daily fluctuations of the financial markets and whether you can afford to leave your money in the investment for long periods of time to ride out down periods. As with other mutual funds, losing money is a risk of investing in the Fund. The equity securities in the Fund s portfolio are subject to stock market risk. A company's stock price in general may decline over short or even extended periods, regardless of the success or failure of a company s operations. Equity securities tend to be more volatile than bonds. In addition, to the degree the Fund invests in foreign securities, there is a possibility that the value of the Fund s investments in foreign securities will decrease because of unique risks, such as currency exchange-rate fluctuations; foreign market illiquidity; emerging market risk; increased price volatility; uncertain political conditions; exchange control regulations; foreign ownership limits; different accounting, reporting, and disclosure requirements; difficulties in obtaining legal judgments; and foreign withholding taxes. Prospectus 2

5 An investment in the Fund is not a deposit in USAA Federal Savings Bank, or any other bank, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. PERFORMANCE The following bar chart and table are intended to help you understand the risks of investing in the Fund. The Fund has two classes of shares: Fund Shares and Institutional Shares. The bar chart provides some indication of the risks of investing in the Fund and illustrates the Fund Shares' volatility and performance from year to year for each full calendar year over the past 10 years. The table shows how the average annual total returns of the share classes for the periods indicated compared to those of the Fund's benchmark index and an additional index of funds with similar investment objectives. Remember, historical performance (before and after taxes) does not necessarily indicate what will happen in the future. For the most current price, total return, and yield information for the Fund, log on to usaa.com or call (800) 531-USAA (8722) or (210) USAA Aggressive Growth Fund

6 RISK/RETURN BAR CHART Annual Returns for Periods Ended December 31 50% 28.60% 34.43% 25% 13.03% 7.23% 5.33% 14.88% 17.31% 12.62% 0% -2.49% -25% -50% % NINE-MONTH YTD TOTAL RETURN 5.24% (9/30/14) BEST QUARTER* WORST QUARTER* 17.28% 1st Qtr % 4th Qtr *Please note that Best Quarter and Worst Quarter figures are applicable only to the time period covered by the bar chart. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain situations, the return after taxes on distributions and sale of fund shares may be higher than the other return amounts. A higher after-tax return may result when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. The actual after-tax returns depend on your tax situation and may differ from those shown. If you hold your shares through a tax-deferred arrangement, such as an individual retirement account (IRA) or 401(k) plan, the after-tax returns shown in the table are not relevant to you. Please note that after-tax returns are shown only for the Fund Shares and may differ for the Institutional Shares. Prospectus 4

7 AVERAGE ANNUAL TOTAL RETURNS For Periods Ended December 31, 2013 Past Past Past 1 Year 5 Years 10 Years Aggressive Growth Fund Shares Return Before Taxes 34.43% 17.37% 6.69% Return After Taxes on Distributions 31.02% 16.41% 6.24% Return After Taxes on Distributions and Sale of Fund Shares 21.23% 14.09% 5.40% Past Past Past Institutional Shares Inception Date 1 Year 5 Years 10 Years 08/01/08 Aggressive Growth Fund Institutional Shares Return Before Taxes 34.84% 17.85% % Indexes Russell 1000 Growth Index (reflects no deduction for fees, expenses, or taxes) 33.48% 20.39% 7.83% 10.83% Lipper Large-Cap Growth Funds Index (reflects no deduction for taxes) 35.41% 19.43% 7.08% 9.31% INVESTMENT ADVISER USAA Asset Management Company SUBADVISER(S) Wellington Management Company, LLP (Wellington Management) Winslow Capital Management, LLC (Winslow Capital) 5 USAA Aggressive Growth Fund

8 PORTFOLIO MANAGER(S) Wellington Management Paul E. Marrkand, CFA, Senior Vice President, Partner, and Equity Portfolio Manager of Wellington Management, has managed the portion of the Fund attributed to Wellington Management since July Winslow Capital Patrick M. Burton, CFA, is a Managing Director of Winslow Capital and has been with the firm since He has been part of the investment management team for the portion of the Fund attributed to Winslow Capital since March Justin H. Kelly, CFA, is the Chief Investment Officer (since March 2013) and Portfolio Manager/Analyst of Winslow Capital and has been with the firm since He has been part of the investment management team for the portion of the Fund attributed to Winslow Capital since July Clark J. Winslow founded Winslow Capital in 1992 and is the Chief Executive Officer. From 1992 to March 2013, he was also the Chief Investment Officer. He has been part of the investment management team for the portion of the Fund attributed to Winslow Capital since July PURCHASE AND SALE OF SHARES Fund Shares: You may purchase or sell shares of the Fund on any business day through our website at usaa.com or mobile.usaa.com; by mail at P.O. Box , San Antonio, Texas ; by telephone at (800) 531-USAA (8722) or (210) ; or by fax to (800) You also may purchase or sell shares of the Fund through USAA Brokerage Services and certain other financial intermediaries. Minimum initial purchase: $3,000 Minimum subsequent investment: $50 Institutional Shares: The Institutional Shares are not offered for sale directly to the general public. The minimum initial purchase is $1 million; however, the Fund reserves the right to waive or lower purchase minimums in certain circumstances. Prospectus 6

9 TAX INFORMATION The Fund intends to make distributions that may be taxed as ordinary income or long-term capital gains, unless you invest through an IRA, 401(k) plan, or other tax-deferred account or are a tax-exempt investor. PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of such shares and certain servicing and administrative functions. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary s website for more information. 7 USAA Aggressive Growth Fund

10 USAA Asset Management Company (AMCO) manages this Fund. For prospectus. INVESTMENT OBJECTIVE What is the Fund s investment objective? The Fund seeks capital appreciation. The Fund s Board of Trustees (the Board) may change the investment objective without shareholder approval. PRINCIPAL INVESTMENT STRATEGY What is the Fund s principal investment strategy? With respect to the portion of the Fund s assets invested by Wellington Management, Wellington Management will invest the Fund s assets in a broad universe of large-cap growth stocks, that are generally broadly diversified across market sectors. With respect to the portion of the Fund s assets invested by Winslow Capital, under normal circumstances, Winslow Capital will invest the Fund s assets (net assets plus any borrowings for investment purposes) in large-capitalization companies, which Winslow Capital defines as those companies having a market capitalization in excess of $4 billion at the time of purchase and that Winslow Capital believes will provide an opportunity for achieving superior portfolio returns (i.e., returns in excess of the returns of the average stock mutual fund) over the long term. The equity securities in which the Fund principally invests are common stocks, preferred stocks, securities convertible into common stocks, and securities that carry the right to buy common stocks. May the Fund s assets be invested in foreign securities? Yes. While most of the Fund s assets will be invested in U.S. securities, up to 20% of the Fund s total assets may be invested in foreign securities purchased in either foreign or U.S. markets. These foreign holdings may include securities issued in emerging markets as well as securities issued in established markets. Will the Fund s assets be invested in illiquid securities? The Fund may invest up to 15% of its net assets in illiquid securities, which generally are securities that the Fund cannot expect to sell or dispose of in the Prospectus 8

11 ordinary course of business within seven days at approximately the value ascribed to such securities. How are the decisions to buy and sell securities made? Wellington Management Wellington Management utilizes an investment process that leverages its extensive research resources and emphasizes a balance of growth, quality, and valuation criteria in selecting stocks. This investment approach is based on the following beliefs that stock selection (rather than top-down factors) should drive performance. By maintaining a diversified portfolio of growth stocks, which incorporates the attributes of growth, quality, and valuation but does not tilt toward any one of them, Wellington Management believes it should be able to deliver more consistent results over time. Wellington Management s approach to valuing stocks incorporates multiple scenarios of future growth and profitability. Wellington Management believes that this approach better reflects the variability of real-world results and the inherent degrees of uncertainty in forecasting the future. Winslow Capital When purchasing stocks for the Fund, Winslow Capital looks for companies typically having some or all of the following attributes: addressing markets with growth opportunities; favorable market share; identifiable and sustainable competitive advantages; a management team that can perpetuate the firm s competitive advantages; and attractive, and preferably rising, returns on invested capital. Winslow Capital takes a bottom-up investment approach when selecting investments. This means it bases investment decisions on company specific factors, not general economic conditions. Under normal market conditions, Winslow Capital employs a sell discipline pursuant to which it may sell some or all of its position in a stock when a stock becomes fully valued, the fundamental business prospects are deteriorating, or the position exceeds limits set by Winslow Capital. TEMPORARY DEFENSIVE STRATEGY The Fund may, from time to time, take temporary defensive positions that are inconsistent with the Fund s principal investment strategies in attempting to respond to adverse market, economic, political, or other conditions. The effect of taking such a temporary defensive position is that the Fund may not achieve its investment objective. 9 USAA Aggressive Growth Fund

12 RISKS Equity Risk: The equity securities in the Fund s portfolio are subject to stock market risk. A company s stock price in general may decline over short or even extended periods, regardless of the success or failure of a company s operations. Stock markets tend to run in cycles, with periods when stock prices generally go up, and periods when stock prices generally go down. However, domestic and international stock markets also can move up and down rapidly or unpredictably due to factors affecting securities markets generally, particular investments, or individual companies. Foreign Investing Risk: There is the possibility that the value of the Fund s investments in foreign securities will decrease because of unique risks, such as currency exchange-rate fluctuations; foreign market illiquidity; emerging market risk; increased price volatility; uncertain political conditions; exchange control regulations; foreign ownership limits; different accounting, reporting, and disclosure requirements; difficulties in obtaining legal judgments; and foreign withholding taxes. Foreign investing may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies. Two risks that require significant examination on foreign investing are: Emerging Markets Risk: Investments in countries that are in the early stages of their industrial development involve exposure to economic structures that generally are less diverse and mature than those in the United States and to political systems that may be less stable. Political Risk: Political risk includes a greater potential for coups d état, revolts, and expropriation by governmental organizations. Liquidity Risk: Certain securities held by the Fund may be difficult (or impossible) to sell at the time and at the price the Fund would like due to a variety of factors, including general market conditions, the perceived financial strength of the issuer, or specific restrictions on resale of the securities. Consequently, the Fund may have to hold these securities longer than it would like and may forgo other investment opportunities. It also is possible that the Fund could lose money or be prevented from earning capital gains if it cannot sell a security at the time and price that is most beneficial to the Fund. Lack of liquidity may impact valuation of such securities and the Fund s net asset value adversely, especially during times of financial distress. In addition, the Fund may not be able to raise cash when needed or may be forced to sell other investments to raise cash, which could impact the Fund s performance negatively. Infrequent trading of securities also may lead to an increase in their Prospectus 10

13 price volatility. Liquidity is a general investment risk that potentially could impact any security, but funds that invest in privately placed securities, certain small-company securities, high-yield bonds, mortgage-backed or asset-backed securities, foreign or emerging market securities, derivatives, or other structured investments, which all have experienced periods of illiquidity, generally are subject to greater liquidity risk than funds that do not invest in these types of securities. Management Risk: The Fund is subject to management risk, which is the possibility that the investment techniques and risk analyses used by the Fund s manager(s) will not produce the desired results. In addition, we operate under a manager-of-managers structure, which gives us the right, with the prior approval of the Board and without shareholder approval, to change subadviser(s). If we add or replace a subadviser of the Fund, the Fund could experience higher portfolio turnover and higher transaction costs than normal if the new subadviser realigns the portfolio to reflect its investment techniques and philosophy. A realignment of the Fund s portfolio could result in higher net realized capital gains and, therefore, distributions thereof, which would affect the tax efficiency of the Fund negatively. Market Risk: The risk that the securities markets will move down, sometimes rapidly and unpredictably based on overall economic conditions and other factors. Changes in the financial condition of a single issuer can impact a market as a whole. In addition, markets and market-participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at-large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. Market turmoil may be reflected in perceptions of economic uncertainty, price volatility in the equity and debt markets, and fluctuating trading liquidity. In response, governments may adopt a variety of fiscal and monetary policy changes, including but not limited to, direct capital infusions into companies, new monetary programs, and lower interest rates. An unexpected or quick reversal of these policies could increase volatility in the equity and debt markets. Market conditions and economic risks could have a significant effect on domestic and international economies, and could add significantly to the risks of increased volatility for the Fund and the inability to attain the Fund s investment objective. Equity securities tend to be more volatile than bonds. In 11 USAA Aggressive Growth Fund

14 addition, displays of political gridlock at the federal level surrounding deficit reduction and the statutory debt ceiling could increase the possibility of market turmoil. In August 2011, Standard & Poor's Ratings Services lowered its longterm sovereign credit rating on the United States from "AAA" to "AA+," citing, among other reasons, controversy over the rising statutory debt ceiling and growth in public spending. Any further downgrades to the U.S. government's sovereign credit rating, or its perceived creditworthiness, could adversely affect the U.S. and global financial markets and economic conditions. There can be no assurance that governmental or other measures to aid economic recovery will be effective. ADDITIONAL INFORMATION This prospectus doesn t tell you about every policy or risk of investing in the Fund. For additional information about the Fund s investment policies and the types of securities in which the Fund s assets may be invested, you may want to request a copy of the statement of additional information (SAI) (the back cover tells you how to do this). PORTFOLIO HOLDINGS A description of the Fund s policies and procedures with respect to the disclosure of the Fund s portfolio securities is available in the Fund s SAI, which is available upon request. FUND MANAGEMENT AMCO serves as the manager of the Fund. The Fund is one of 52 no-load mutual funds offered by USAA Mutual Funds Trust. We are an affiliate of United Services Automobile Association (USAA), a large, diversified financial services institution. Our mailing address is P.O. Box , San Antonio, Texas We had approximately $135 billion in total assets under management as of October 31, We provide investment management services to the Fund pursuant to an Advisory Agreement. Under this agreement, we are responsible for managing the business and affairs of the Fund, subject to the authority of and supervision by the Board. A discussion regarding the basis of the Board s approval of the Fund s Advisory and Subadvisory Agreements is available in the Fund s annual report to shareholders for the period ended July 31. For our services, the Fund pays us an investment management fee, which is comprised of a base investment management fee and a performance adjustment. Prospectus 12

15 The base investment management fee, which is accrued daily and paid monthly, is equal to an annualized rate of one-half of one percent (0.50%) of the first $750 million of average daily net assets, two-fifths of one percent (0.40%) for that portion of average daily net assets in excess of $750 million but not over $1.5 billion, and one-third of one percent (0.33%) for that portion of average daily net assets in excess of $1.5 billion. The performance adjustment is calculated separately for each class of shares of the Fund on a monthly basis and will be added to or subtracted from the base investment management fee depending upon the performance over the performance period of the respective share class relative to the performance of the Lipper Large-Cap Growth Funds Index. The Lipper Large-Cap Growth Funds Index tracks the total return performance of the 30 largest funds within the Lipper Large-Cap Growth Funds category. This category includes funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) of greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P Composite 1500 Index. Large-cap growth funds normally invest in companies with long-term earnings expected to grow significantly faster than the earnings of the stocks represented in a major unmanaged stock index. The performance period for each share class consists of the current month plus the previous 35 months. The annual performance adjustment rate is multiplied by the average daily net assets of the Fund over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance) or subtracted from (in the case of underperformance) the base investment management fee as referenced in the following chart: Over/Under Performance Annual Adjustment Rate Relative to Index (in basis points as a percentage (in basis points) 1 of the Fund s average daily net assets) 1 +/ 100 to 400 +/ 4 +/ 401 to 700 +/ 5 +/ 701 and greater +/ 6 1 Based on the difference between average annual performance of the relevant share class of the Fund and its relevant Lipper index, rounded to the nearest basis point. Average daily net assets of the share class are calculated over a rolling 36-month period. Under the performance fee arrangement, the Fund will pay a positive performance fee adjustment for a performance period whenever the Fund outperforms 13 USAA Aggressive Growth Fund

16 the Lipper Large-Cap Growth Funds Index over that period, even if the Fund had overall negative returns during the performance period. For the fiscal year ended July 31, 2014, the performance adjustment was subtracted from the base investment management fee of 0.46% by 0.03% for both the Fund Shares and the Institutional Shares. In addition to providing investment management services, we also provide administration and servicing to the Fund. Our affiliate, USAA Shareholder Account Services (SAS), provides transfer agency services to the Fund. The Fund or the Fund s distributor or transfer agent may enter into agreements with third parties (Servicing Agents) to pay such Servicing Agents for certain administrative and servicing functions. USAA Investment Management Company acts as the Fund's distributor. The Fund uses a manager-of-managers structure. We are authorized to select (with approval of the Board and without shareholder approval) one or more subadvisers to manage the actual day-to-day investment of the Fund s assets. We monitor each subadviser s performance through quantitative and qualitative analysis and periodically report to the Board as to whether each subadviser s agreement should be renewed, terminated, or modified. We also are responsible for allocating assets to the subadviser(s). The allocation for each subadviser can range from 0% to 100% of the Fund s assets, and we can change the allocations without shareholder approval. We have entered into Investment Subadvisory Agreements with Wellington Management and Winslow Capital under which Wellington Management and Winslow Capital each provide day-to-day discretionary management for a portion of the Fund s assets in accordance with the Fund s investment objective, policies, and restrictions, subject to the general supervision of the Board and AMCO. Wellington Management and Winslow Capital are compensated directly by AMCO and not by the Fund. Wellington Management is a Massachusetts limited liability partnership with principal offices at 280 Congress Street, Boston, Massachusetts Wellington Management is a professional investment counseling firm which provides investment services to investment companies, employee benefit plans, endowments, foundations, and other institutions. Wellington Management and its predecessor organizations have provided investment advisory services for over 89 years. As of September 30, 2014, Wellington Management had investment management authority with respect to approximately $892 billion in assets. On or about January 1, 2015, investment advisory services will be provided by Wellington Management Company LLP, a Delaware limited liability partnership. Prospectus 14

17 Winslow Capital is located at 4720 IDS Tower, 80 South Eighth Street, Minneapolis, Minnesota 55402, and has been an investment adviser since Winslow Capital is a wholly owned subsidiary of Nuveen Investments, Inc. which is a indirect subsidiary of TIAA-CREF. TIAA-CREF constitutes the ultimate principal owner of Winslow Capital. As of September 30, 2014, Winslow Capital had investment management authority with respect to approximately $36.2 billion in assets. PORTFOLIO MANAGER(S) Wellington Management Paul E. Marrkand, CFA, Senior Vice President, Partner, and Equity Portfolio Manager of Wellington Management, has managed the portion of the Fund attributed to Wellington Management since July Mr. Marrkand joined Wellington Management as an investment professional in Winslow Capital Justin H. Kelly, CFA and Patrick M. Burton, CFA, are jointly responsible for the day-to-day portfolio management of the portion of the Fund managed by Winslow Capital, along with Clark J. Winslow, who also serves as Winslow Capital s Chief Executive Officer. Justin H. Kelly, CFA, is the Chief Investment Officer (since March 2013) and a Portfolio Manager / Analyst of Winslow Capital and has been with the firm since He has been part of the investment management team for the Fund since July Education: summa cum laude, Babson College, B.S. in finance/investments. He is also a Chartered Financial Analyst. Patrick M. Burton, CFA, is a Managing Director of Winslow Capital and has managed a portion of the Fund since March Mr. Burton joined Winslow Capital in 2010 and has 30 years of experience in the securities industry. Prior to joining Winslow Capital, Mr. Burton was a Senior Equity Research Analyst at Thrivent Asset Management from 2009 to Prior to that, Mr. Burton was a Managing Director with Citigroup Investments from 1999 to Education: B.S. with distinction in finance, University of Minnesota. He is also a Chartered Financial Analyst. Clark J. Winslow founded Winslow Capital in 1992 and is the Chief Executive Officer. From 1992 to March 2013, he was also the Chief Investment Officer. Mr. Winslow has been part of the investment management team for the Fund since July Education: B.A., Yale University and an M.B.A., Harvard Business School. 15 USAA Aggressive Growth Fund

18 The SAI provides additional information about the portfolio managers compensation, other accounts managed, and ownership of Fund securities. CHANGE OF SUBADVISERS We have received an exemptive order from the Securities and Exchange Commission (SEC) that permits us, subject to certain conditions, including prior approval of the Board, to appoint and replace subadvisers, enter into subadvisory agreements, and amend subadvisory agreements on behalf of the Fund without shareholder approval. As a result, we can change the fee rate payable to a subadviser or appoint a new subadviser at a fee rate different than that paid to the current subadvisers, which in turn may result in a different fee retained by AMCO. We will notify shareholders within 90 days after hiring any new subadviser for the Fund. PURCHASES OPENING AN ACCOUNT WITH THE FUND You may purchase shares directly from the Fund or through certain financial intermediaries as described below. If you are opening an account with us by mail, you should return a complete, signed application to open your initial account. However, after you open your initial account with us, you will not need to fill out another application to invest in another fund of the USAA family of funds unless the registration is different or we need further information to verify your identity. As required by federal law, we must obtain certain information from you prior to opening an account with us. If we are unable to verify your identity, we may refuse to open your account, or we may open your account and take certain actions without prior notice to you, including restricting account transactions pending verification of your identity. If we subsequently are unable to verify your identity, we may close your account and return to you the value of your shares at the next calculated net asset value (NAV). We prohibit opening accounts for certain investors, including but not limited to, foreign financial institutions, shell banks, correspondent accounts for foreign shell banks, and correspondent accounts for foreign financial institutions. A foreign shell bank is a foreign bank without a physical presence in any country. A correspondent account is an account established for a foreign bank to receive deposits from, or to make payments or other disbursements on behalf of, the foreign bank, or to handle other financial transactions related to such foreign bank. Prospectus 16

19 TAXPAYER IDENTIFICATION NUMBER Each shareholder named on an account with us must provide a Social Security number or other taxpayer identification number to avoid tax withholding required by the Internal Revenue Code of 1986, as amended (the Code). See the section titled Taxes for additional tax information. PURCHASING SHARES Fund Shares: The Fund Shares are a separate share class of the Fund and are not a separate mutual fund. You may open an account with us and purchase Fund Shares on the Internet, by telephone, or by mail. Fund Shares also are available through USAA Brokerage Services and certain financial intermediaries, as described below. To purchase Fund Shares through your USAA brokerage account, please contact USAA Brokerage Services directly. These shares will become part of your USAA brokerage account and will be subject to USAA Brokerage Services applicable policies and procedures. Additional fees also may apply. If Fund Shares are purchased through a retirement account or an investment professional (e.g., a financial intermediary), the policies and procedures on these purchases may differ from those discussed in this prospectus. Additional fees also may apply to your investment in the Fund, including a transaction fee, if you buy or sell shares of the Fund through a broker or other investment professional. For more information on these fees, check with your investment professional. Institutional Shares: The Institutional Shares are a separate share class of the Fund and are not a separate mutual fund. The Institutional Shares are available for investment through a USAA discretionary managed account program, and certain advisory programs sponsored by financial intermediaries, such as brokerage firms, investment advisors, financial planners, third-party administrators, and insurance companies. Institutional Shares also are available to institutional investors, which include retirement plans, endowments, foundations, and bank trusts, as well as a USAA Fund participating in a fund-of-funds investment strategy and other persons or legal entities that the Fund may approve from time to time. Copies of the Fund's annual report, semiannual report, and SAI are available from your financial intermediary or plan sponsor. 17 USAA Aggressive Growth Fund

20 MINIMUM INITIAL PURCHASE Fund Shares: $3,000. However, the Fund reserves the right to waive or lower purchase minimums in certain circumstances. Institutional Shares: $1 million. However, the Fund reserves the right to waive or lower purchase minimums in certain circumstances. ADDITIONAL PURCHASES Fund Shares: $50 per transaction minimum, per account. Employees of USAA and its affiliated companies may make additional purchases through payroll deduction for as little as $25 per pay period. Institutional Shares: There is no subsequent purchase minimum for the investment in the Institutional Shares of the Fund through any applicable discretionary managed account or similar investment program and/or certain other USAA affiliated products. EFFECTIVE DATE OF PURCHASE When you make a purchase, your purchase price will be the NAV per share next determined after we or the financial intermediary receive your request in proper form (e.g., complete, signed application and payment). The Fund s NAV per share is determined as of the close of the regular trading session (generally 4 p.m. Eastern time) of the New York Stock Exchange (NYSE) each day it is open for trading. If we or the financial intermediary receive your purchase request in proper form prior to that time, your purchase price will be the NAV per share determined for that day. If we or the financial intermediary receive your purchase request in proper form after that time, the purchase price will be the NAV per share calculated as of the close of the next regular trading session of the NYSE. The Fund or the Fund's distributor or transfer agent may enter into agreements with Servicing Agents, which hold Fund Shares or Institutional Shares in omnibus accounts for their customers, under which the Servicing Agents are authorized to receive orders for shares of the Fund on the Fund s behalf. Under these arrangements, the Fund will be deemed to have received an order when an authorized Servicing Agent receives the order. Accordingly, customer orders will be priced at the Fund s NAV next computed after they are received by an authorized Servicing Agent even though the orders may be transmitted to the Fund by the Servicing Agent after the time the Fund calculates its NAV. Prospectus 18

21 PAYMENT If you plan to purchase shares from us with a check, money order, traveler s check, or other similar instrument, the instrument must be written in U.S. dollars and drawn on a U.S. bank. We do not accept the following foreign instruments: checks, money orders, traveler s checks, or other similar instruments. In addition, we do not accept cash or coins. If you plan to purchase shares through a financial intermediary, please check with that financial intermediary regarding acceptable forms of payment. REDEMPTIONS For federal income tax purposes, a redemption of shares of the Fund is a taxable event, upon which you may recognize a capital gain or loss (unless you hold shares of the Fund in a tax-deferred account or are a tax-exempt investor). A capital gain or loss is based on the difference between your basis in the redeemed shares and the proceeds you receive upon their redemption. See the section titled Taxes for information regarding basis election and reporting. The Fund may elect to suspend the redemption of shares or postpone the date of payment in limited circumstances (e.g., by order of the SEC). REDEEMING SHARES Fund Shares: If you have an account with us, you may redeem Fund Shares by Internet, by telephone, or by mail on any day the NAV per share is calculated. Fund Share redemptions will receive a redemption price of the NAV per share next determined after we receive your request in proper form. If we receive your redemption request in proper form prior to the close of the NYSE's regular trading session (generally 4 p.m. Eastern time), your redemption price will be the NAV per share determined for that day. If we receive the redemption request after that time, the redemption price will be the NAV per share calculated as of the close of the next regular trading session of the NYSE. Telephone redemption privileges are established automatically when you complete your application. The Fund has undertaken certain authentication procedures regarding telephone transactions and will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. Before any discussion regarding your account, we will obtain certain information from you to verify your identity. Additionally, your telephone calls may 19 USAA Aggressive Growth Fund

22 be recorded or monitored, and confirmations of account transactions are sent to the address of record or by electronic delivery to your designated address. If Fund Shares are held through USAA, we will send your money within seven days after the effective date of redemption. However, payment for redemption of shares purchased by electronic funds transfer (EFT) or check will be sent after the EFT or check has cleared, which could take up to seven days from the purchase date. If Fund Shares are held in your USAA brokerage account, please contact USAA Brokerage Services regarding redemption policies. These shares are part of your USAA brokerage account, and any redemption request received in proper form prior to the close of the NYSE (generally 4 p.m. Eastern time) will receive the NAV per share determined for that day, subject to USAA Brokerage Services applicable policies and procedures. If Fund Shares are held in your account with another financial intermediary, please contact your financial intermediary regarding redemption policies. Generally, any redemption request you place with your financial intermediary in proper form prior to the close of the NYSE (generally 4 p.m. Eastern time) will receive the NAV per share determined for that day, subject to the financial intermediary's applicable policies and procedures. Institutional Shares: Redemptions of Institutional Shares will receive a redemption price of the NAV per share next determined after we receive the request in proper form. If we receive the redemption request in proper form prior to the close of the NYSE's regular trading session (generally 4 p.m. Eastern time), the redemption price will be the NAV per share determined for that day. If we receive the redemption request after that time, the redemption price will be the NAV per share calculated as of the close of the next regular trading session of the NYSE. We will send your money within seven days after the effective date of redemption. CONVERTING SHARES CONVERTING FROM INSTITUTIONAL SHARES INTO FUND SHARES If you no longer meet the eligibility requirements to invest in Institutional Shares of the Fund (e.g., you terminate participation in a USAA discretionary management account program), we may convert your Institutional Shares into Fund Shares. The Fund will notify you before any such conversion into Fund Shares occurs. Prospectus 20

23 PRICING When a conversion occurs, you receive shares of one class of a Fund for shares of another class of the same Fund. At the time of conversion, the dollar value of the new shares you receive equals the dollar value of the old shares that were converted. In other words, the conversion has no effect on the value of your investment in the Fund at the time of the conversion. However, the number of shares you own after the conversion may be greater than or less than the number of shares you owned before the conversion, depending on the NAVs per share of the two share classes. A conversion between share classes of the same Fund is a nontaxable event. EXCHANGES For federal income tax purposes, an exchange of shares between funds is a taxable event, upon which you may recognize a capital gain or loss unless you hold the shares in a tax-deferred account or are a tax-exempt investor. A capital gain or loss is based on the difference between your basis in the exchanged shares and the NAV of the shares when they are exchanged. See the section titled Taxes for information regarding basis election and reporting. EXCHANGE PRIVILEGE The exchange privilege is automatic when you complete your application with us. You may exchange shares between funds in the USAA family of funds, provided the shares to be acquired are offered in your state of residence. The Fund, however, reserves the right to terminate or change the terms of an exchange offer. Exchanges made through the USAA self-service telephone system and usaa.com require an Electronic Services Agreement (ESA) and EFT Buy/Sell authorization on file. After we receive the exchange orders, the Fund s transfer agent will simultaneously process exchange redemptions and purchases at the share prices next determined pursuant to the procedures set forth herein. See the section titled Effective Date of Purchase for additional information. The investment minimums applicable to share purchases also apply to exchanges. If shares of the Fund are held in your USAA brokerage account, please contact USAA Brokerage Services regarding exchange policies. These shares are part of your USAA brokerage account, and any exchange request received in proper form prior to the close of the NYSE (generally 4 p.m. Eastern time) will receive the NAV per share determined for that day, subject to USAA Brokerage Services applicable policies and procedures. 21 USAA Aggressive Growth Fund

24 If shares of the Fund are held through a retirement account or an investment professional (i.e., a financial intermediary), the policies and procedures on an exchange may differ from those discussed in this prospectus. Additional fees also may apply to your investment in the Fund, including a transaction fee, if you buy, sell, or exchange shares of the Fund through a broker or other investment professional. For more information on these fees, check with your investment professional. OTHER IMPORTANT INFORMATION ABOUT PURCHASES, REDEMPTIONS, AND EXCHANGES CONTACTING USAA The following features may be available to you to purchase, redeem, and exchange Fund Shares you hold in a USAA mutual fund account with us. Internet Access usaa.com Log on to usaa.com and select register now or call (800) Once you have established Internet access to your account, you will be able to access account information and make most account transactions. This includes opening and funding a new mutual fund account; making purchases, exchanges, and redemptions; reviewing account activity; checking balances; and more. Mobile Access mobile.usaa.com Review account information and make most account transactions. USAA Self-Service Telephone System (800) 531-USAA (8722) or (210) Access account information and make most account transactions. This service is available with an ESA and EFT Buy/Sell authorization on file. Telephone Call toll free (800) 531-USAA (8722) or (210) Monday Friday, 7:30 a.m. to 8 p.m. Central time and Saturday, 8 a.m. to 5 p.m. Central time to speak with a member service representative. Prospectus 22

25 Fax Send a signed fax with your written redemption instructions to (800) In certain instances we may require a signature from all owners associated with an account. Mail If you would like to open an account or request a redemption by mail, send your application and check or written instructions to: Regular Mail: USAA Investment Management Company P.O. Box San Antonio, TX Registered or Express Mail: USAA Investment Management Company 9800 Fredericksburg Road San Antonio, TX Bank Wire To add to your account or request a redemption by bank wire, visit us at usaa.com or call (800) 531-USAA (8722) or (210) for instructions. This helps to ensure that your account will be credited or debited promptly and correctly. Electronic Funds Transfer Additional purchases on a regular basis may be deducted electronically from a bank account, paycheck, income-producing investment, or USAA money market fund account. Sign up for these services when opening an account or log on to usaa.com or call (800) 531-USAA (8722) or (210) to add them. DISTRIBUTION FEES The Fund may apply a distribution fee to all full IRA distributions, except for those due to death, disability, divorce, or transfer to other USAA lines of business. Partial IRA distributions are not charged a distribution fee. ACCOUNT BALANCE SAS may assess annually a small balance account fee of $12 to each shareholder account with a balance of less than $2,000 at the time of assessment. Accounts exempt from the fee include: (1) any account regularly purchasing additional 23 USAA Aggressive Growth Fund

26 shares each month through an automatic investment plan; (2) any UGMA/ UTMA account; (3) all (non-ira) money market fund accounts; (4) any account whose registered owner has an aggregate balance of $50,000 or more invested in USAA mutual funds; and (5) all IRAs (for the first year the account is open). EXCESSIVE SHORT-TERM TRADING The USAA Funds generally are not intended as short-term investment vehicles (except for the money market funds, Short-Term Bond Fund, Ultra Short-Term Bond Fund, and Tax Exempt Short-Term Fund). Some investors try to profit by using excessive short-term trading practices involving mutual fund shares, frequently referred to as market timing. Excessive short-term trading activity can disrupt the efficient management of a fund and raise its transaction costs by forcing portfolio managers to first buy and then sell portfolio securities in response to a large investment or redemption by short-term traders. While there is no assurance that the USAA Funds can deter all excessive and short-term trading, the Board has adopted the following policies (except for the money market funds, Short-Term Bond Fund, Ultra Short-Term Bond Fund, and Tax Exempt Short-Term Fund). These policies are designed to deter disruptive, excessive short-term trading without needlessly penalizing bona fide investors. To deter such trading activities, the USAA Funds policies and procedures state that: Each fund reserves the right to reject any purchase order, including an exchange, that it regards as disruptive to the efficient management of the particular fund. Each fund may use a fair value pricing service or other model to assist in establishing the current value of foreign securities held by any of the USAA Funds. Fair value pricing is used to adjust for stale pricing that may occur between the close of certain foreign exchanges or markets and the time the USAA Funds calculate their NAV per share. Using fair value pricing is intended to deter those trying to take advantage of time-zone differences in the valuation of foreign securities and to prevent dilution to long-term investors. Fair value pricing of a foreign security can result in the USAA Funds using a price that is higher or lower than the closing price of a foreign security for purposes of calculating a fund s NAV. Prospectus 24